World Bank cancels loan worth $250 million to Pakistan

Islamabad: The World Bank has cancelled financial assistance of $250 million to Pakistan. The credit was supposed to help uplift the Pakistani economy. However, due to failed negotiations with Pakistan, the World Bank has decided to cancel the said loan. The World Bank has delivered a jolt to Pakistan with the decision as Pakistan is on the brink of bankruptcy. Only a day ago, Nikki Haley, the US ambassador to the United Nations, had showered severe criticism over Pakistan saying that the country supporting terrorism should not receive even a single dollar.

A World Bank delegation was due to visit Pakistan, but the visit was cancelled. The visit is said to be cancelled as a result of the failed negotiations between Pakistan and the International Monetary Fund (IMF). However, officials of the World Bank have denied any connection between the two events. The World Bank has claimed that Pakistan needs to undertake specific economic reforms and certain decisions were expected from the country to cope with the crises of climate change. Pakistan is believed to have declined the proposal to bring about the concerned changes and hence, the loan of $250 million was cancelled.

Currently, Pakistan possesses only $7.5 billion worth of foreign reserves in the coffers of Pakistan. The amount would suffice for paying the bills for exports of merely six weeks. As per World Bank’s standards Pakistan should be in possession of foreign reserves which are enough to pay for the export bills of at least ten weeks. However, Pakistan’s performance on the criteria has been disappointing. Meanwhile, Pakistan is currently struggling to gain financial support from the IMF. Nevertheless, the IMF had laid down certain conditions before it approved the support. These include the prerequisite of Pakistan’s decision on undertaking stringent economic reforms.

Pakistan’s Prime Minister Imran Khan had criticised the previous Pakistani governments of driving the country’s economy to dust by taking financial support from the IMF. He had also promised during his election campaign that his government would never beg before the IMF. However, within just three months of forming the government, Prime Minister Imran Khan has already appealed to the IMF for support. The move has elicited severe criticism from within Pakistan. Moreover, some of the analysts and journalists have claimed that if Imran Khan agrees to the conditions laid down by the IMF, the situation of the Pakistani public shall worsen further.

The United States controls the institutions of the World Bank as well as the IMF such that the Pakistani economy is now suffering the effects of its strained relations with the United States. A day ago, Nikki Haley, the US ambassador to the United Nations had suggestively stated that the country which continues to support terrorism should not receive a single dollar. Soon after, the news of the World Bank’s decision to cancel the loan of $250 million to Pakistan was received. Thus, Imran Khan who had won appreciation from the Pakistani public for adopting an assertive stand before the United States seems to be paying a steep price for it.